Multiple sources have informed Daily Trust that the surge in rice prices can be partly attributed to the rush for rice by suppliers enlisted by federal and state governments.
In various states, market traders have reported increased demand driven by government contractor requests, which have not been met adequately by rice millers.
On August 17, the National Economic Council approved a 5-billion-naira grant for each of the 36 states, along with five truckloads of rice as a palliative measure following the removal of fuel subsidies. Most states confirmed receiving these supplies and began using part of the grant to procure additional grains, including rice, for distribution.
Each state received 3,000 bags of 50 kg rice, totaling 111,000 bags distributed among the states and the Federal Capital Territory. Contractors assigned to supply rice to the states have faced difficulties due to dwindling rice availability in the markets.
A contractor from Northern Nigeria expressed concern, suggesting that the federal government should consider importing rice to stabilize prices and prevent food shortages.
Abdullahi Ali, a resident of Kano, expressed dissatisfaction with the situation, stating that the cost of rice had risen, making it more challenging for families like his to afford it.
In Abuja, Janet Yusuf, a restaurant owner, reported an increase in the price of a plate of rice, from N1,200 to N1,700 in just two weeks.
A source within a federal government agency disclosed that the original intention behind the government’s palliative effort was to alleviate the impact of fuel subsidy removal, hunger, and low purchasing power among the population. Unfortunately, as the government moved to secure rice supplies, prices surged by over N10,000 per bag in the last ten days, a development that distressed the government.
Another source echoed that the shortage of rice in the market and its subsequent high cost resulted from the strong demand generated by both the states and the federal government. This situation has raised concerns about the potential impact on other commodities if the government attempts to purchase them in large quantities.
The National Emergency Management Authority (NEMA), responsible for distributing rice to the states, declined to comment on allegations that its decision to procure rice through contractors had contributed to the high retail prices.
A source in the Presidency defended the government’s approach, emphasizing that it aimed to support market women and traders, although the high demand for rice might necessitate considering other food items if rice supplies remained insufficient.
Agricultural experts attributed the rising cost of locally grown rice to factors such as inadequate paddy supply for local millers and the stockpiling of rice by government agents and Prime Anchors appointed by the Central Bank of Nigeria (CBN). These Prime Anchors were tasked with providing funds and agricultural inputs to outgrowers but failed to do so.
In Kano, the price of imported rice from Thailand increased from N42,000 per bag to N47,500 in Singa Market, while in Maiduguri, Borno State, local rice prices soared, with a 100kg bag reaching N85,000. The scarcity of paddy and high demand due to government palliatives were cited as contributing factors.
In Plateau State, both foreign and Nigerian rice prices rose, primarily due to product scarcity and high contractor demand. Similarly, Benue State witnessed an increase in rice prices attributed to inadequate paddy supply and government palliative distribution.
Rivers State reported elevated rice prices across various markets, driven by high demand. In Abuja, Nigerian-grown rice prices surged due to inadequate paddy supply.
Arch. Kabiru Ibrahim, the National President of the All Farmers Association of Nigeria (AFAN), pointed out that inflation in rice prices was caused by various factors, including the failure of CBN-appointed prime anchors to support outgrowers, floods in 2022, impulse buying by millers, and government purchases during inflationary periods.
In summary, the spike in rice prices in Nigeria is the result of a complex interplay of factors, including high demand driven by government interventions, inadequate paddy supply, and various market dynamics.